Setup homes waste time
loading...
loading...
Setup homes are over-priced listings that buyers reportedly love to tour, but inevitably will not submit an offer on when less expensive comparable properties are available. Sellers of over-priced homes are either misled by their agent into thinking their home is correctly priced, or allowed to stubbornly assert their home is an exception.
Seller’s agents allow their sellers to over-price their homes for a number of reasons; most are intentional, some not. An agent may have inaccurate expectations about the property which exceed market realities, or they may be aware of the pricing problem and simply not want to risk losing the listing or alienating the seller by a disclosure of market realities; sounding negative and putting off the seller in the process.
End of free preview
The rest of this content is only available to first tuesday Members. If you are a current first tuesday Member, please login above.
Not a current Member? For only $29.50, our Annual Membership includes access to:
- the first tuesday journal;
- over 350 first tuesday real estate forms;
- over 35 FARM letters; and
- a 16-book reference library and more!
To sign up, visit firsttuesday.us!
loading...
loading...
About The Author
Carrie B. Reyes
is lead writer in charge of the Real Estate Practice and Due Diligence and Disclosures books.
![11money-house[1]](http://firsttuesdayjournal.com/wp-content/uploads/11money-house13-106x75.jpg)
Sellers expecting more and more was one causative factor in the recent housing bubbles. And pray tell, how did sellers come upon such an idea?
How did sellers, right before and during the last bubble, come to the conclusion that their homes were worth so very much? This was a time when 3 bedroom shacks in Manhattan Beach were selling for $1.5 million.
Could it have been the AGENTS who hyped the seller to list for more? My, my, we wouldn’t want to say that now would we? That would infer that the agent was after a higher commission. We wouldn’t want to infer that now would we?
Because that might implicate the agents as one of the causes for the bubbles to begin with? An agent would never be greedy for a higher commission, would he?
loading...
The above comments ignore the fact that agents don’t earn any commissions, unless the listed property sells. Most time agents have informed the prospective seller of their estimate for an actual selling price – but they meet with an irresolute seller who hasn’t faced up to the current market prices. The agent takes the listing, with the intention, or maybe even a verbal agreement with the seller, that they will adjust/lower the price when they see the market’s response – then the seller won’t budge on price. No price is absolute until there is an agreement between the buyer and seller on price – that is the true market value – under any economic conditions.
loading...
The above comment does not take into account the power of persuasion and the power of the glitter and magic created by the ecstasy of a rising market. Yes people come under a “glamour” of sorts.
Appraisers, agents, and lenders all participated in the euphoria, which created a FABRICATED VALUE, not a true market value during the bubble.
The valuations and the lending were NOT based on sound, time-tested principles. Instead, lust for huge quick profits reigned supreme.
Lenders, brokers, and appraisers spread the fairy dust far and wide, and everyone was mesmerized by greed for profit. This was not just subtle greed. It was EXCESSIVE in its expression, as wild flipping testified.
Buyers WERE indeed encouraged by the euphoria and by over-eager agents to list as high as possible during the bubble. Eager appraisers, pushed by brokers, tagged along in the creation of the FABRICATED VALUES.
The fabricated values were false, as has been proven since. No 3-bedroom shack in Manhattan Beach could ever be truly worth $1.5 million to any truly sane buyer.
When “TRUE” market value is not really true, but a hyped false and fabricated value, everyone ends up suffering. Greed played a significant role in the housing bubble.
Greed always exacts a price on the downswing.
It’s a Law of Nature. If you think you can espouse greed and get away with it will all positive results, just try it. You’ll quickly learn otherwise. History tells the story since time immemorial.
It’s a Law of Nature.
loading...
athena, your analysis is typical of the uninformed and also faulty. those of us with more than 5 years in the trade were well aware of the unsupportable rise of sale prices that was a DIRECT AND EASILY ASCRIBED result of the ABANDONMENT OF UNDERWRITING by the more aggressive of the lenders like AmeriQuest, Countrywide, ICI, New Century and such that permitted even folks with no job to lie and get a loan. The result was that many millions of folks that couldn’t buy lunch without a co-signer were now in the buyer pool and the expanded demand had the axiomatic result of driving up prices. this is econ 101. Prior to the entry of wall street and the engineering of the exotic “investment instruments” all lenders had underwriters that vetted the borrowers and said no to those that were unqualified. Even the crooks at Countrywide had a long history of making conforming loans to people with jobs (imagine that) and pooling them and selling them off to the likes of Fannie and Freddie. With the entry of the trainloads of wall street cash, and the dictum of the second tier B school types that were peddling that cash to the lenders to ‘book loans’, the need to be conforming was GONE ENTIRELY…the new rule was BOOK LOANS, WE’LL BUY EVERYTHING YOU CLOSE. NO NEED TO BE CONFORMING. no need to underwrite at all…just make the loans, we’ll figure out how to dress them up and peddle them off.
this was a watershed moment and we all saw the in-house loan officers leave banks where they had to endure underwriting to relocate to brokerages that peddled the No Questions Asked product.
all the persuasion in the world cannot make an underwriter grant a $600,000 loan to a self employed gardener…the lust for profits was real indeed but the originating seed, the fertile soil and the fertilizer ALL came straight outta wall street.
loading...